Medicare Compliance & Reimbursement

Learn the difference between ‘complex’ and ‘automated’ reviews.

In early August, the Centers for Medicare & Medicaid Services (CMS) announced a delay in awarding new Recovery Audit contracts. Meanwhile, the agency announced plans to restart some claims reviews during the wait time.

Word on the street: CMS was preoccupied settling a protest from Region B contractor, CGI Federal, Inc. in the U.S. Court of Federal Claims.

“The current RACs are performing under a contract competitively awarded in 2008 that allowed for a base year and four options,” a CMS spokesperson shared with Eli in August, shortly after its contract delay announcement. “Consistent with federal statutes and regulations promoting competition, CMS is re-competing the follow-on RAC contracts.” 

Interesting: It just so happens that CMS apparently “shut down the current RACs before the end of their contracts,” according to Tim Johnson, executive director of Jackson Davis HealthCare, a Medicare audit defense firm in Denver.

Regardless, CGI Federal’s protest has now been dismissed, CMS has moved ahead with new RAC contracts, and the agency promises positive changes to the program. CMS announced in February planned improvements for the audit process once the new contracts began. For example, RACs must wait until the second level of appeal is exhausted before they receive their contingency fee. To read the other changes, visit http://tinyurl.com/qffuwz4. 

Many frustrated providers, however, won’t believe the good news ‘til they see it. “RACs don’t strictly adhere to Medicare coverage criteria when reviewing cases,” Johnson says. “They use a lot of opinions from their medical review nurses. Where providers are legally obligated to follow formalized Medicare coverage criteria, the RACs either don’t understand the rules or simply don’t care that rules do in fact exist.”

Cover Your Bases Before Things Get ‘Complex’

While CMS is continuing to fine-tune the recovery audit process and decrease provider burden, don’t relax too much. In the August announcement from CMS on the delayed contracts, the agency mentioned that while most RAC reviews would be “automated,” a limited number would be “complex reviews of topics selected by CMS.” 

So what exactly does “complex” mean? “Complex Review requires a review of the supporting medical records to determine whether there is an improper payment,” a CMS spokesperson tells Eli. “The reviewer must be a qualified health care coder or clinician, based on the type of review being undertaken.” See page 5 of the 2012 RAC Report to Congress for more details at http://tinyurl.com/m9gtaas. 

Watch for: “The largest potential focus area for the new RACs could be in the review of hospital inpatient cases and the recent ‘2 Midnight Rule’ implementation,” Johnson says. “CMS has put timeline restrictions on which records will be open to the new RACs for audit, but this could be a major issue.”

A sampling of topics currently under complex review by Connolly, Inc., RAC for Region C, include medical necessity of percutaneous transluminal angioplasties, speech generating devices and accessories, medical necessity of sacral nerve stimulation for urinary incontinence, negative wound pressure therapy pumps, and medical necessity for major joint replacements, among others.